Educational information, not individual financial advice.
Key Takeaways
Compound growth is what happens when the money your investments earn starts earning its own money. It is the mechanism behind almost every serious long-term wealth story, and the reason starting early beats starting with more.
Put $10,000 into an account that earns 7% a year. After one year you have $10,700. After two years you have $11,449 — $700 from the first year plus $749 from the second (you earned $49 of interest on last year's $700 of interest). After ten years you have about $19,672. After thirty years you have about $76,123.
That $76,123 is not $10,000 plus thirty years of $700 payments. Thirty years of simple interest would have been $10,000 + $21,000 = $31,000. Compounding multiplied the result more than 2x.
Showing a generic example — not your plan.
Adjust the inputs to see how small changes in rate or horizon compound into very different outcomes.
The counterintuitive fact about compounding is that time matters more than rate over long horizons. Consider two investors:
Investor A ends with about $567,000. Investor B ends with about $567,000 as well — despite contributing three times as much money. If Investor B had started just 5 years earlier, the gap would be dramatic.
Early dollars have more time to compound. That is the whole game.
Three ingredients:
The third is why tax-advantaged retirement accounts are so powerful — they remove friction from the compounding process. You don't pay capital gains taxes every year, so every dollar of return becomes part of next year's base.
A 25-year-old contributes $7,500/year (the 2026 IRA limit) to a Roth IRA at 7% until age 65. Total contributions: $300,000. Final balance: about $1.6 million. Of that, about $1.3 million is investment growth, not contributions.
Your assets in Horizons grow at strategy-specific rates each month. The Monte Carlo simulation runs 200+ scenarios with correlated market shocks, and what you see at the end is the distribution of what compounding produces under many different return paths. The 4% Rule and safe-withdrawal-rate analysis is essentially the reverse problem: how much can you un-compound each year without running out.
Two investors both end up with $567,000 at age 65. Investor A saved $60k total (age 25–35, then stopped). Investor B saved $180k total (age 35–65). What's the main reason they land in the same place?
Try it in your scenario
Known limitations
Sources
Educational information distilled from the Horizons engine methodology — not individual financial advice.
Quick check
A quick self-check, just for you — no score, nothing saved beyond your own progress.
After 30 years, $10,000 at 7% grows to about $76,000 — but 30 years of simple interest would total only $31,000. What explains the gap?
Why does an untouched, tax-advantaged account compound especially well?
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The Rule of 72
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